March 8, 2021

SEC Releases FAQs on New Rules Establishing Updated Regulatory Framework for Fund Valuation Practices

The staff of the SEC’s Division of Investment Management (Staff) has released responses to frequently asked questions (FAQs) related to the adoption of rules 2a-5 and 31a-4 under the 1940 Act (Rules).   Rule 2a-5 establishes requirements for satisfying a fund board’s obligation to determine fair value in good faith for…

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March 5, 2021

Mutual Fund Sponsor Receives Approval for First Mutual Fund to ETF Conversion

Two mutual funds advised by Guinness-Atkinson, Guinness Atkinson Asia Pacific Dividend Builder Fund and Guinness Atkinson Dividend Builder Fund (Guinness Atkinson Funds), recently received a declaration of effectiveness from the SEC on a Form N-14 registration statement to convert into SmartETFs Asia Pacific Dividend Builder ETF and SmartETFs Dividend Builder…

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February 11, 2021

Two Semi-Transparent ETF Sponsors Receive Amended Exemptive Relief to Use “Custom Baskets”

On February 9, 2021, the SEC granted amended exemptive relief for two sponsors of semi-transparent ETFs (ST ETFs) to permit these ST ETFs to create and redeem creation units with authorized participants (APs) in exchange for “custom baskets” (Amended Relief). ST ETFs are ETFs that generally do not disclose their full portfolio holdings each day before trading begins on the stock exchange where they are listed. The Amended Relief was granted in response to separate applications filed by Invesco and Natixis relates to “proxy portfolio” ST ETFs. Rather than disclosing its entire portfolio, a proxy portfolio ST ETF discloses a portfolio of other securities and assets that are intended to be highly correlated with the ST ETF’s portfolio securities.

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February 8, 2021

Independent Directors Council Submits Comment Letter on Federal Trade Commission’s Proposed Amendments to Premerger Notification Requirements

The Independent Directors Council (IDC) recently submitted a comment letter on the Federal Trade Commission’s (FTC) notice of proposed amendments to the premerger notification rules (Proposed Amendments).  These rules govern premerger notification filings that the FTC uses to determine in advance whether transactions are likely to be anticompetitive under the…

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January 25, 2021

SEC Staff Grants No-Action Relief from Section 17(f) of the 1940 Act and Rule 17f-2 Thereunder with Respect to Self-Custody of Loan Interests

On January 13, 2021, the SEC staff (Staff) granted no-action relief pursuant to Section 17(f) of the 1940 Act and Rule 17f-2 thereunder with respect to certain funds (Funds) or their directors or officers if the Funds, each acting as self-custodian of its assets, maintain custody of loan interests pursuant…

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December 30, 2020

Invesco Receives Relief from the SEC to Launch Semi-Transparent ETFs

Invesco Capital Management LLC (Invesco) recently received exemptive relief from the SEC to launch semi-transparent, actively-managed ETFs registered under the 1940 Act (ST ETFs) that follow a “proxy portfolio” model.  ST ETFs are ETFs that generally do not disclose their full portfolio holdings each day before the open of trading. …

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December 23, 2020

SEC Amends Rules to Facilitate Electronic Submission of Documents

In light of the public health concerns and logistical challenges facing registrants due to the COVID-19 pandemic, as well as technological developments in the authentication and security of electronic signatures, the Securities and Exchange Commission (SEC) has voted to adopt amendments to Regulation S-T and the Electronic Data Gathering, Analysis…

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December 18, 2020

Pricing Service to Pay $8 Million to Settle SEC Charges

The SEC recently settled charges against a global securities pricing service and registered investment adviser (Pricing Service), for compliance deficiencies relating to its delivery to clients of prices for certain categories of fixed-income securities based on quotes it received from a single market participant (single broker quotes).  According to the…

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December 18, 2020

SEC’s Investment Management Division Issues Guidance on Funds’ Risk Disclosure Regarding Investments in Emerging Markets

The SEC Division of Investment Management’s Disclosure Review and Accounting Office (Staff) has issued guidance (Guidance) based on current findings from the Staff’s ongoing review of risk disclosures for both actively managed and index funds with significant exposure to emerging markets. The Guidance notes that in many emerging markets there…

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December 17, 2020

SEC Adopts Rule to Modernize Fund Valuation Practices

On December 3, 2020, the SEC adopted new Rule 2a-5 (Rule) under the 1940 Act addressing valuation practices and the role of the board of directors/trustees (board) with respect to determining the fair value of the investments of a registered investment company or business development company (fund). Section 2(a)(41) of…

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